Citigroup Trading Revenue Boosts Q2 Results


A surge in fixed-income trading revenue amid a roller coaster ride on Wall Street helped Citi turn a profit during a turbulent second quarter, despite credit losses and weakness in its consumer banking unit.

Citigroup on Tuesday (July 14) reported a 68 percent jump in fixed-income trading revenues for the quarter, which helped the New York financial services giant beat analyst estimates for both earnings and revenue.

The big increase in fixed-income trading revenue, combined with a rise as well in investment banking activity, pushed Citi’s revenue for the quarter 5 percent higher to $19.8 billion, up from $18.8 billion during the same period a year ago.

Citi’s Institutional Clients Group, which covers both fixed-income trading and investment banking, saw a 21 percent jump in revenue during the second quarter to $12.1 billion, up from $10 billion during the second quarter of 2019.

The big surge in trading revenue helped Citi post a profit of 50 cents a share for the quarter, beating analyst estimates of 28 cents a share and also beating analyst predictions of $19.1 billion in revenue for the quarter.

By contrast, Citi’s Global Consumer Banking division took a 10 percent hit in revenue, falling to $7.3 billion in the second quarter, down from $8.1 billion in the same period a year ago.

Net credit losses surged 12 percent to $2.2 billion for the quarter, with Citi reporting it had provided some form of relief or adjustment to 2 million credit card holders.

“While credit costs weighed down our net income, our overall business performance was strong during the quarter, and we have been able to navigate the COVID-19 pandemic reasonably well,” Citi CEO Michael Corbat said in a press statement. “The Institutional Clients Group had an exceptional quarter, marked by an increase in Fixed Income of 68%. Global Consumer Banking revenues were down as spending slowed significantly due to the pandemic.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.